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Minister Davies to Appeal the Judgment of Micro-Finance South Africa
The Minister of Trade and Industry, Dr Rob Davies will appeal the recent North Gauteng High Court judgment in which the court set aside the Regulations on 6 November 2015 relating to short term credit transactions that Davies issued on the 6 November 2016. The court set the regulations aside on the 21 November 216 after the Micro-Finance South Africa (MFSA) disputed the reduction of the maximum prescribed interest rate from 5% per month on the first loan to 3% per month for subsequent loans in the same calendar year.
The MFSA and the Judge are of the view that the reduction of interests’ rate from 5% to 3% does not take the interest of the credit market into account at all. Accordingly the Regulations were set aside.
Minister Davies is of the view that the appeal allows an opportunity to clarify issues raised in the judgment, as the reduction is informed amongst others, by the fact that consumers are not able to repay the debt in one month and often go back for another loan on top of the unpaid debt and interest. This debt spiral is the one that informed the Minister to issue the Regulations
The Minister is of the view that the Judge did not take into account the facts and evidence submitted by
. As a consequence the Minister is appealing this decision, as he believes that a different court will come to a different conclusion.
Sidwell Medupe-Departmental Spokesperson
Tel: (012) 394 1650
Mobile: 079 492 1774
Issued by: The Department of Trade and Industry
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